TLDR Fitch Ratings says slow earnings recovery and heavy capital spending are keeping debt high at several Asia-Pacific gaming operators. Genting Bhd and Genting Malaysia were cut to BBB- in September, and their debt outlook depends largely on the New York casino project. SJM Holdings was downgraded to B+ in May, but Fitch expects its leverage to fall from about 9.0 times to 6.0 times by 2028. Universal Entertainment, owner of Okada Manila, was cut to CCC+ in July over weak demand and a falling share of VIP gaming. Fitch says exclusive and monopoly gaming licenses remain a key credit strength for the region’s sector.
Fitch Ratings says high debt levels remain a problem for several gaming companies in the Asia-Pacific region. The ratings agency pointed to slower earnings recovery and heavy capital spending as the main reasons.
The findings come from Fitch’s “APAC Gaming – Peer Credit Analysis” report. The review covered Genting Bhd, Genting Malaysia Bhd, SJM Holdings Ltd, Universal Entertainment Corp., and Tabcorp Holdings Ltd.
Fitch said its recent downgrades were not caused by a broad weakening in the region’s gaming industry. Instead, they were tied to problems at individual companies, including leverage, spending, earnings, and operating conditions.
The agency said EBITDA growth has been slower than expected compared with large capital spending plans. This has kept debt levels high for longer.
Genting’s New York Casino in Focus
Genting Bhd and Genting Malaysia are both rated BBB- with stable outlooks. Fitch cut both companies from BBB in September.
The downgrade reflected expansion spending in Singapore and New York. It also reflected higher start-up costs in New York and a slow recovery in other markets.
Fitch expects Genting Bhd’s proportionately consolidated EBITDA net leverage to stay above 4.0 times over the next three years. The